The 1990s witnessed a rapid proliferation of computer technology into homes and businesses. During this time, computers, fueled by growth of the much-heralded Internet, advanced from facilitating tasks, such as word processing and bookkeeping, to become everyday communications tools, fast approaching the commonness of telephones and televisions. As a result, virtually every sector of public, private, and commercial life has been affected in some way by the power and reach of today's computer technology.
The financial-services industry, for example, has recently seen not only the emergence of Internet-based trading platforms that allow online trading of stocks, bonds, and commodities, but also the emergence of online listing centers that allow broker-dealers—individuals or firms in the business of buying and selling securities for themselves and others—to match sellers with buyers of securities based on listed indications of interest” (IOIs). A seminal example of such an online center is the AutEx™ service from Thomson Financial of New York, N.Y.
This service provides a secure and convenient means for broker-dealers to broadcast their desires, or interests, in purchasing or selling blocks of particular stock to a select group of securities traders, generally known collectively as buy-side traders. (Block trades are typically defined as trades of at least 10,000 shares or trades with a total market value of at least $200,000.) For example, the AutEx system provides three types of IOIs: 1) a general IOI which identifies a stock and a general number of shares, such as large, medium or small; 2) a super IOI which identifies a stock, a specific number of shares, and price; and 3) a natural IOI which not only identifies a stock, a specific number of shares, and a price, but also signals existence of an active customer order for the stock.
A buy-side trader viewing these IOIs in an online list can then select an IOI for a stock and create a placeholder trade ticket in her order management system, with the ticket order including information from the IOI. Next, the buy-side trader contacts the IOI sender via a separate telephone, email, or instant messaging system to discuss a potential trade. If agreement is reached, the buy-side trader manually edits the placeholder trade ticket (in their buy-side Order Management System (OMS)) to conform to the terms and. electronically sends the agreed on trade terms to the dealer trading system. The dealer then proceeds to execute the trade, reporting the transaction to the public market place and returning resulting execution reports to the buy-side OMS.
Although the AutEx system is quite successful, the present inventors have recognized that it is limited in at least two ways. First, it forces users to exit the system to negotiate and to complete trades based on IOIs. This exiting is not only cumbersome and time consuming, but in fast-moving markets can result in lost trading or profit opportunities. Second, conventional systems, such as the AutEx system, provide few options for IOI senders to control usage of their IOIs. For example, a sender can define an IOI, its duration, and its recipients, but cannot offer one set of recipients different IOI response options than another.
Accordingly, the present inventors have recognized a need for better ways of using IOIs to facilitate trading.